How EU startup backing helped enrich InnoEnergy executives – Follow the Money

Executives at the clean technology investor InnoEnergy took home bonuses that were made possible in part by public money, Follow the Money can reveal, despite earlier denials by the company. 

Former employees and analysts called the practice – the latest in a string of controversies to be reported at the EU-backed company – “wrong” and “grotesque”.

While the bonuses were not paid directly from EU grants, they were indirectly made possible by public funding. 

It worked like this: InnoEnergy used EU grants to help startups, in return for taking 10-15% equity in them, often at a low price or nominal value. When those startups increased in value and their shares were sold for a profit, a portion of the proceeds went to executives as bonuses. This generated at least €1 million since 2013. 

When Follow the Money asked InnoEnergy earlier this year if the bonuses its management received were funded by public money, a spokesperson made the response crystal clear. 

He stressed bonuses “have never been paid with EIT grant funds” – referring to the European Institute of Innovation and Technology (EIT), from which InnoEnergy has received €760 million since 2010 to carry out tasks in the public interest.

But public sources combined with interviews with two former employees show that public money did in fact play a part, via what was referred to as a “long-term incentive plan”.

While the set-up of the scheme was legal, the former staffers and a campaign group said it seemed unethical.

“It felt wrong to learn that public money turned into hard cash bonuses for the management. Especially because management already received high salaries and other bonuses,” one former InnoEnergy employee told Follow the Money on condition of anonymity.

FTM previously reported former Chief Executive Officer Diego Pavia and current acting co-CEO Bart de Beer have together earned more than €9.2 million in total pay since InnoEnergy was founded in 2010.

Other investigations found that InnoEnergy’s claim to have trained more than 100,000 people to work in Europe’s battery industry did not add up, while an estimate that its portfolio companies could cut 2.3 gigatonnes of CO₂ equivalent by 2030 was criticised as unrealistic.

This June, meanwhile, FTM found that the European Public Prosecutor’s Office (EPPO) launched an investigation into InnoEnergy following a complaint alleging financial irregularities and fraud. At the time, InnoEnergy said it was unaware of any EPPO probe.

‘Bad deal’ for entrepreneurs

InnoEnergy helped startups through business creation programmes. It would support entrepreneurs as they developed innovative ideas by offering services like coaching, office space and legal assistance.

InnoEnergy would fund the costs of these services with EIT grants or in-kind contributions from partner organisations. The startups would not be billed for these services. However, to participate in these programmes, startups would have to agree to sell equity to InnoEnergy. 

“The CEO, CFO and country directors received a substantial percentage of the profit made when InnoEnergy sold shares of start-ups in its portfolio,” said the former employee. “Before the sale, InnoEnergy had supported those startups with public funding for years.” 

How much executives earned as a percentage of the individual portfolio exits, and the total amount that has been paid over the years, is unclear. When contacted for comment, InnoEnergy refused to say. The former employee could only say it was “a substantial percentage”. The total amount InnoEnergy’s managers received over the years is also somewhat obscure. 

In its annual reports until 2022, it reported a total of €1.1 million in “other long-term employee benefits” paid to management, which an InnoEnergy spokesperson previously said were related to “significant returns on portfolio exits”. 

But the financial report for 2022 also reported the company owed management a total of €1.4 million for the long-term incentive plan. Even that figure could be an underestimate, since it did not include any payouts done over the course of a year between reports.

A second ex-employee said that the scheme allowed InnoEnergy to invest in startups with “zero risk”, but brought personal profit to the managers if their investment became successful.

“I was against public money being turned into personal gain through the long-term incentive plan. It was one of the reasons I left,” they said. The former insider added that while InnoEnergy had checked if the scheme would be legally in line with EU rules, they were not aware of any moral discussions about the role of public money in helping managers acquire bonuses. 

One contract between InnoEnergy and an entrepreneur who had enrolled in the programme, seen by Follow the Money, made the transactional nature explicit. 

The “Business Creation Service Agreement” said InnoEnergy would “charge no fees to the Entrepreneur. In compensation, the Entrepreneur agrees to grant KIC a share within the range of 10 to 15% in the equity capital of the legal entity to be established for the implementation of the Project.” 

KIC stands for Knowledge and Innovation Community, a status which the EIT has granted InnoEnergy and nine other private organisations that carry out public tasks in exchange for EU money.

Marlene Schörner, policy fellow at the Jacques Delors Centre in Berlin, has done research into Europe’s innovation funding landscape. She told Follow the Money it sounded like a “bad deal” for participating entrepreneurs “to sell that much equity at nominal value at such an early stage”.

She did not understand why InnoEnergy would need to be “compensated” in the form of equity. “It is not clear to me if there are any costs for InnoEnergy that are not yet covered by either EU money or partners,” Schörner said.

She knew of other incubators that offered similar programmes supporting startups, yet didn’t demand equity in return, like the Technical University of Munich Incubator. “It doesn’t sit right with me to make entrepreneurs sell that much equity at such an early stage. 10 to 15% of equity is a lot. To give that up just to participate in the programme is excessive,” she added.

‘Grotesque’

When FTM described the process to democracy campaigner Kenneth Haar of watchdog Corporate Europe Observatory, he expressed strong objections. “This use of funds from the outside looks pretty grotesque,” said Haar. “It is not the job of the [European] Commission or the EIT to support the hefty income of CEOs.”

But a spokesperson for the EIT told FTM that KICs were in fact “encouraged to build asset portfolios, among others via taking equity in start-ups, with the prospect of generating revenues in the future”.

The EIT had no opinion to give about the bonuses for top executives. “KICs are independent legal entities and are responsible for setting their own remuneration policies,” a spokesperson said.

Figures from InnoEnergy’s annual financial reports revealed that the profits on sold assets can be significant. 

For example, its 2016 report showed InnoEnergy had bought 15% of shares in Prodrone for a price of €2,460, a Portuguese company that InnoEnergy said “benefited” from its services. It later reported it owned 22.1% of shares, which it sold in 2021 for €1,170,579.

The price at which InnoEnergy bought shares was sometimes very low. In 2016, InnoEnergy reported having bought 10% of shares for €120 for five separate Polish companies; 15% of shares in a German company for €176; and 12.5% of shares of a Dutch company for €13. 

Its list of assets even included a transaction of €0 to acquire 9.91% of shares in a Dutch company. This suggests the price was rounded down and that the shares were bought at their nominal value: the statutes of that business said its shares had a nominal value of €0.01.

InnoEnergy has been forthright about requiring equity from participants in publicly supported business creation programmes. Three of its employees, including co-founder and current acting co-CEO Elena Bou, were interviewed for an EU-funded report published by the International Energy Agency (IEA) in 2022.

“EIT InnoEnergy is publicly co-funded to support start-ups (including with cash transfers), which it does in exchange for equity investments, new ones the IEA report said.

Meanwhile, key people have left InnoEnergy in the last half year while the financial sustainability of the company seems in question.

Grant reduction 

In 2023, InnoEnergy announced it secured a €140 million investment from both existing shareholders and new ones. 

However, the following year it reported a €52 million loss. Its 2025 performance is still unknown, as the company has not yet filed its financial report. 

“The financial situation at InnoEnergy is hopeless”, said one former employee who left this year. “There is hardly any revenue.” 

FTM asked InnoEnergy to comment on its current financial situation. A spokesperson said only that it was “focused on delivering the next phase of its strategy, building on 16 years of investment, innovation and growth across Europe”.

A 2025 financial report from one of its shareholders, the Eindhoven University of Technology (TU/e), said InnoEnergy made preparations that year for another private placement of equity worth €500 million in 2026. However, no such investment deal has been announced so far.

The company also is still waiting for the final verdict about a €10 million grant it received to train a new generation of European battery experts. Following FTM’s discovery of serious discrepancies in the numbers InnoEnergy reported to the EU, the EIT has taken almost a year to assess the case. It has now confirmed to FTM that “there will be a grant reduction”.

“Key people are leaving the sinking ship”

This year also saw drastic changes in the company’s leadership. Of the 10 executive board members it had at the start of 2026, six are left. According to InnoEnergy’s website, four of the 11 members of the supervisory board have also left, without being replaced.

InnoEnergy CEO Sebastien Clerc stepped down in September eight months into the job. InnoEnergy said publicly Clerc wanted “to pursue other professional opportunities”, but submitted to the Dutch company register that Clerc had been “suspended” as of 7 August. When questioned by Follow the Money, the company would not comment on whether this wording suggested wrongdoing. 

Clerc was replaced by co-founder Elena Bou and CFO Bart de Beer as co-CEOs.

The CEO of the company’s Scandinavian branch, Lowina Lundström, also left, according to minutes of an extraordinary general meeting held on 8 October, seen by FTM. The record stated that De Beer took over.

Also that month, Christian Bauer began a new job elsewhere less than a year-and-a-half after becoming CEO of InnoEnergy’s German branch. Their departures in turn followed the exit of executive board member Karine Vernier in June, who led InnoEnergy France.

“Changes in senior leadership have been managed through the appropriate governance processes,” InnoEnergy said in a statement. “We do not comment on individual remuneration details or employment matters.”

“Key people are leaving the sinking ship,” said one ex-staffer with years of experience.